Developmental process of vertebrate embryos are regulated, at least in part, by secreting molecules such as growth factors. We are focusing on the function of Bone Morphogenetic Proteins (BMPs) that are the members of TGF-beta superfamily during mouse development. To reveal the function of BMP signaling, we have generated a mutant mouse that is deficient for BMP type IA receptor (Bmpr or Alk3) by conventional gene targeting technologies. Homozygosity of Bmpr caused severe embryonic lethality and mutant embryos die at embryonic day 7.5 without mesoderm formation. Detailed analysis of mutant embryos demonstrated that signaling through Bmpr was important to (1) control cell cycle prior to mesoderm induction and (2) regulate specification of fate of mesoderm. Bmpr is expressed in various tissues at various stage of development as well as adult tissues. For the functional analysis of Bmpr in later stage of development, we introduced a newly invented technology called tissue-specific gene targeting. Using this technology, we mutated Bmpr in bone-specific manner (specific for mature osteoblasts). The bone-specific Bmpr deficient mice are viable indicating we can avoid embryonic lethality of Bmpr mutation by tissue-specific gene targeting technology. Mutant mice are smaller than normal littermate and show irregular calcification and less deposition of bone matrix in their bones. These results are the first evidences that BMP signaling is required for normal bone formation in vivo.